Wednesday, February 27, 2013

We would like to thank you for the supports you have given to us in the past. We are very proud that the followers of our blog has been increasing gradually over the past few years from nil to approximately 125. Given the fact that accounting and auditing is a rather niche area, we have no complaints.

Nevertheless, we would like to remind our readers that: please feel free to drop us email at myauditing@gmail.com if you have any questions relating to accounting and auditing issues, client-related matters, career advancements, university-related questions. We will try out best to answer the concerns you posted to us.

Wednesday, February 6, 2013

As an auditor, we should also review the reasonableness of petty cash amount held by individual. Petty cash are generally held by invidiual (usually employees of a company) for disbursement of daily expenses / urgent payment when necessary.

Nevertheless, an individual shall not hold petty cash amount far exceeded the amounts required. This is because there is potential risk that individual may mis-appropriate the funds and resulted in financial loss to the Company.

As a result, management should exercise control to review the budgeted petty cash outflow for the month and furnish this petty cash to the person in-charge. It is not ideal for the Company to disburse significant cash amount to an individual. The Company can always top-up the petty cash amount when requested.

Monday, February 4, 2013

Some of our audit clients may have subsidiaries in overseas, e.g. China and Malaysia.

If your audit clients have presence in China and Malaysia, pelase take note that there is a increase in minium wages in certain provinces of China and the entire Malaysia. The minium wages differ among differnt provinces in China. It is important for you as auditor to find out the actual minimum wages rate for the particular regions where you audit client has presence. For Malaysia, the minium wages has increased to RM 900.

It is important to form an expectation that the salary costs are expected to increase in FY 2012, if your audit clients have presence in the countries mentioned above.

Sunday, February 3, 2013

Our audit client may have recorded deferred tax assets and liabilities on its balance sheet/ statement of financial position. Deferred tax is essentially the tax impact arising from the temporary difference between the Company's accounting and tax carrying value. For instance, the net book value of a property-plant and equipments are usually different between accounting book and tax book. This could be because the depreciation policy for accounting book ( i.e. set by the Company) and tax book (i.e. set by the authority) is different.

In reviewing the financial statement of our audit clients, who has recorded the deferred tax, we need to ensure that the Company has disclosed the source of the deferred tax assets / liabilities. This helps the financial statement users to understand the nature of the deferred tax assets / liabilities.

About Me

I am a passionate auditor & sme specialiast, who is keen in sharing my experiences in auditing & accounting, small & meidum enterprises. The exposure gains from dynamic audit life urge me to share the idea with everyone of yours, in order to benefit the general public at large.
Other than the topics shared, you might want to post the questions related to accounting & auditing issues/ accounting & auditing career/ small & medium enterprises issue to my email: myauditing@gmail.com (audit related), mysmeblog@gmail.com (sme related).